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Not Korea Or Syria, But Venezuela

Caracas is about five hundred miles south of Puerto Rico, and it’s home to one of the most troubled economies in the world. And, while the United States has indeed played a part in letting this happen, as a whole it’s mostly the fault of the Venezuelan government.

Books could be written here, and some no doubt have been. I’m going to keep this short, however, and in order to do that I’m going to oversimplify. (You should read more yourself later; start here.)

Years ago, strongman Hugo Chavez rose to power in Venezuela. He presided as dictator over a Socialist worker’s paradise, an apparent vindication of the theory that direct government control over the entirety of an economy can eliminate poverty while maintaining production. It worked quite well for years, and for two reasons: First, the primary export of Venezuela is oil, and they have lots. Second, the economy is supplemented by trade in drugs, guns, people, and just about anything else that can be sold overseas for a vast profit.

(Of course, this income mostly goes to the more corrupt Venezuelan government officials rather than the people. Socialism is fine in principle, but in practice I guess getting rich trumps all that. Check out the vice president here in this CNN story.)

Unfortunately for Venezuela, their government made several of the same errors that the Soviets did in Cold War Russia. Among these was the promotion of people within industry not for their ability but for their loyalty to party, not for their grasp of science but instead their political doctrine. And Venezuelan oil, which requires rather more processing than crude from most other sources, is being refined with techniques and equipment that dates from well before the “Bolivarian Revolution” that brought Chavez to power in the late 90s. Production is in decline, demand is dropping, and the economy is collapsing as a result.

It’s also true that the United States has occasionally levied sanctions against Venezuela, alleging human rights violations. (More recently, though, the sanctions have been directed at individuals who are engaged in running drugs et cetera to the US; that’s being frowned upon these days.) Far more telling, however, is the continued exploitation of Venezuelan oil reserves by nominally American international oil conglomerates, which return very little of the massive profits gained thereby to the Venezuelan government through taxes.

So it could be said with some truth that the United States has harmed Venezuela’s economy. However, it’s far more accurate to blame that country’s economic woes on their own inept management of the nationalized oil corporation. As well, the concentration of the Venezuelan workforce within that one industry has made them vulnerable to even minor global shifts in price and supply.

The present situation in Venezuela has turned critical. According to a January article in the Washington Post, the only question is which will completely collapse first: the economy, or the government? If you’re keeping track of the Venezuelan Bread War, it’s pretty apparent that the economy is now completely shot. (This article by Fabiola Sanchez provides an excellent insight.)

With all this, it’s hardly surprising that their most profitable domestic industry, smuggling, is on the rise. Food is being illegally brought in over the Colombian border, and drugs, weapons, and sex slaves are moving in and out in ever greater numbers. The country is a mess and it’s only getting worse.

And so I for one am compelled to wonder: Given President Trump’s penchant for honoring his campaign promises, and given Candidate Trump’s pledges to promote American industry both at home and abroad, and to vigorously oppose smuggling, just how long is he going to wait before he invades? –I know; that’s not news. It’s purest speculation.